Healthcare Principles In Collision

There certainly has been heated, and at times, mind numbing disagreement over the Affordable Care Act’s nature and purpose.  To some, ACA represents a magnificent reform and to others, confirmation that the nation is headed towards socialism.  Both of these views miss the more fundamental question, “how can it be, in the riches country in the world with modern technology working everywhere, should basic healthcare be available to only those who can afford it?”

Let’s be clear, the question is not “should healthcare be free for everyone?”  Healthcare cost money and those who provide it must be paid.  How to pay for basic healthcare, is a fair question.  But let’s put that question aside until later and consider just the availability of basic healthcare now and under the Affordable Care Act.

The Affordable Care Act is a legislative attempt to provide basic healthcare coverage to all Americans.  The Act falls short of that goal but does extend the coverage compared to what preceded it.  So why the fuss?

News reports have focused upon the malfunction of the healthcare sign up website.  Reporters are breathless about the situation where some individual insurers who purchased policies since the ACA became law, will have to purchase new (and more expensive) policies because the ones they had purchased are deemed inadequate.

ACA opponents disingenuously are raking Obama Administration officials over the coals because the sign up rate is slow.  These opponents want to use Congressional Committees to investigate these matters.  They huff and they puff and assure the American public they only want the best healthcare for Americans.

Opponents have long put forward the view that basic healthcare coverage was a matter of individual choice.  Americans should be free to pick their coverage, including no coverage, these opponents say.  It’s the American way.

Individual choice allows younger and healthier individuals to say “no thanks” to insurance coverage.  This results in the rest of the insured pool to have higher healthcare costs higher insurance rates.

Individual insurance purchasers get his twice.  The higher costs for the pool (minus the younger and healthier cohort) further compounded because individual rates are higher than multi-person pools.   If an individual does not work for a business they in essence become a pool of one and must pay a higher rates than if they had been part of a larger employment group.  Hmmm.

Taking this a step further, an individual has a “pre-existing” condition, they will find most insurance companies unwilling to insure them, or willing but at an extremely high cost.  The consequence, not surprisingly, is that many who would pay for insurance do not and consequently, if they become ill and need medical services, face either personal bankruptcy or the prospect of using Emergency Rooms.  In both of these cases, the unreimbursed medical expenses are paid by the rest of us in the form of higher hospital, doctor, and drug company charges which ends up mainly in higher across the board insurance costs.  Hmmm

So, why are our political leaders having such a fruitless time debating the Affordable Care Act?

In my opinion, our political leaders fail to acknowledge the impact individual choice (to be insured or not) and the use of employers to provide healthcare insurance access has on everyone else.

Individual choice is present everywhere in America.  Some smoke, others run, and some are Vegans.  Some sky diver, others power walk, and some sit on park benches.  Americans makes thousands upon thousands of decision which in some way can impact their health and as a consequence impact their consumption of healthcare services.  Whether these life style choices offset each other is unclear but these are not the choices we can (or should) be concerned with.

Healthcare is a life long need.  Annual US healthcare costs is the sum total of what all Americans consume, young ones, old ones, and everyone in between.  Today this figure is close to $3 trillion or about $9,000 per capita.  The notion that a young individual could obtain a basic healthcare policy for $200 per month ($2,400 per year) means that someone else must pay more than $9,000 in order to offset the younger person’s lower rate.  There is no free lunch.

Most Americans receive the healthcare coverage through their employer, Medicare, or Medicaid.  Consequently almost no one in these groups can conceive of paying a family of four healthcare coverage at $36,000 per year.  So, to most Americans, there is little direct financial consequence for individual choice.  For those who buy their insurance in the open market, the question is quite different.

So maybe this political fight is just about how politicians see the public’s mindset.  Americans are for individual choice and individual responsibility.  They do not want to pay more because of someone else.  Health and healthcare, however, fall in a different category.  There can be no “individual” in modern society when it comes to healthcare.

Arguing whether the Affordable Care Act is a magnificent accomplishment or a utter failure misses the most important point.  Until the US adopts a “universal” healthcare delivery system, like found in over two dozen other modern countries, we will be arguing over who should receive basic healthcare coverage and who should be left to fend for themselves.   We will miss the most fundamental points that current healthcare costs are the world’s highest and the healthcare outcomes just mediocre.  Worse still, the US will be stuck with the financial outcomes that are slowly bankrupting the country, financially and morally.

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